Insight journal - Dealtalk

The deal was announced with fanfare in 2009 with a headline value of $1.24 billion, but was terminated recently as a result of disappointing phase III study results.

AstraZenenca and Targacept announced top line results from their phase III studies investigating efficacy, tolerability and safaty of TC-5214, which was being developed as an adjunct therapy to an antidepressant in patients with major depressive disorder and who did not respond adequately to initial antidepressant treatment.

Both companies have decided to not pursue regulatory filing and so the clinical development program comes to a close.

Psychiatry is a notoriously difficult therapy are in which to obtain significant clinical outcomes, so there was always the possibility that this promising candidate would founder when seeking to demonstrate efficacy over and above antidepressant treatment alone in patients non responsive to standard treatment.

On December 4, 2009, AstraZeneca partnered with Targacept for the development and commercialization of the exciting drug cadidate TC-5214, for the treatment for major depressive disorder.

The key terms of the deal were as follows:

AstraZeneca will make an upfront payment to Targacept of $200 million upon effectiveness and up to an additional $540 million if specified development, regulatory and first commercial sale milestones are achieved.

Targacept will also be eligible to receive up to $500 million if specified sales related milestones are achieved as well as significant stepped double-digit royalties on net sales worldwide.

Targacept has retained an option for a co-promotion of TC-5214 to a limited target physician audience in the US.

AstraZeneca and Targacept will jointly design a global phase III clinical program anticipated to begin in mid 2010 with the goal of filing a new drug application (NDA) with the US Food and Drug Administration (FDA) in 2012.

The failure of TC-5214 is a salient reminder to drug developers that large headline deals accompanying promising early stage compounds provide no guarantee of success when it comes to the ultimate test of a drugs potential - clinical testing in hard to treat patients. However, it should not put companies off from entering such deals. So long as the potential rewards are there and the deal is structured correctly, the ricks of failure should be properly balanced against the potential rewards of success.